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Exclusive: Foxconn exploring sale of $8.8 billion display plant in China - sources

Exclusive: Foxconn exploring sale of $8.8 billion display plant in China - sources
FILE PHOTO: A motorcyclist rides past the logo of Foxconn, the trading name of Hon Hai Precision Industry, in Taipei, Taiwan March 30, 2018. REUTERS/Tyrone Siu -
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TYRONE SIU(Reuters)
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By Yimou Lee

TAIPEI (Reuters) – Taiwan’s Foxconn is exploring the sale of its upcoming $8.8 billion (£7.2 billion) display panel factory in China, people familiar with the matter told Reuters, as demand for the product wanes amid an intensifying U.S.-China trade war.

Foxconn, formally known as Hon Hai Precision Industry, is in talks to appoint banks to find a buyer for its liquid crystal display (LCD) factory that is being built in the southern Chinese city of Guangzhou, said two people with direct knowledge of the matter.

A sale would come at a delicate time for Foxconn, which has extensive investments in China, a large roster of U.S. clients that includes Apple Inc, and is having to navigate a tricky path amid the protracted trade war between Washington and Beijing. It would mark one of its largest divestments from China.

Foxconn’s discussions are at an initial stage and it has not yet come up with a price tag for the so-called Gen-10.5 facility specialising in large-screen LCDs, the sources said, adding a sale was not a surety.

“It’s not an easy sale and it could take a while,” said one of the sources, citing tepid global demand for large-screen LCDs.

Foxconn, in a written statement to Reuters, said: “As a matter of company policy, Foxconn does not respond to market rumours or speculation.” The sources requested anonymity because the deliberations are confidential.

U.S. President Donald Trump sharply raised the stakes in the bruising trade war with China and jolted global financial markets by vowing on Thursday to impose a 10% tariff on $300 billion of Chinese imports from September 1.

(Reporting by Yimou Lee; Editing by Anne Marie Roantree and Muralikumar Anantharaman)

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